Toyota to Pay $17.35 Million in Fines For Delayed Defect Reporting

The U.S. Transportation Department said Tuesday that Toyota Motor Corp. has agreed to pay $17.35 million in civil fines for failing to report safety defects to regulators within five days as required by law.

The Transportation Department announced the action on its website, and said the penalty was the maximum allowed by law. This is the second time since 2010 that Toyota has agreed to pay fines for failing to report vehicle defects to U.S. regulators as required by U.S. laws.

Toyota, in a statement posted on its media website Tuesday, said it had agreed to pay the fines without admitting any violation of its obligations under U.S. motor vehicle safety laws.

In the statement, Toyota North America’s chief quality officer, Ray Tanguay, said the auto maker is “dedicated to the safety of our customers, and we continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customers’ needs. We agreed to this settlement in order to avoid a time-consuming dispute and to focus fully on our shared commitment with NHTSA to keep drivers safe.”

Toyota in 2010 agreed to pay $48.8 million in fines to U.S. regulators for its failure to properly respond to defects that led to recalls for problems related to sticky accelerators, floor mats linked to pedal entrapment and sudden acceleration, and a separate recall related to steering problems. The scandal over Toyota’s handling of these recalls, which were linked to incidents of sudden acceleration, led company Chief Executive Akio Toyoda to vow in testimony before Congress that the company would overhaul the way it handled quality control.

The Transportation department, in its statement, said that the National Highway Traffic Safety Administration in early 2012 began noticing reports that floor mats installed in 2010 Lexus RX sport utility vehicles were sliding out of position and entrapping foot pedals.

In May, the department statement said, regulators contacted Toyota about the trend in the reports, and a month later Toyota told NHTSA officials that the company knew of 63 incidents of possible floor mat pedal entrapment involving 2010 Lexus RX models that it had received since 2009. The DOT statement said that Toyota technicians and dealer personnel had reported incidents of unwanted acceleration had been caused because floor mats shifted and trapped accelerators.

Toyota told NHTSA in June 2012 that it would recall 154,036 2010 Lexus RX models to fix the problem, the DOT statement said.

As part of the settlement announced today, Toyota and its U.S. subsidiaries will take action “to improve their ability to take into account the possible consequences of potential safety-related defects.”

In early 2012, NHTSA’s Office of Defects Investigation began noticing a trend in floor mat pedal entrapment in 2010 Lexus RX 350s in Vehicle Owner Questionnaires (VOQs) and Early Warning Reporting data. In May, NHTSA contacted Toyota regarding the trend, and a month later Toyota advised NHTSA that it was aware of 63 alleged incidents of possible floor mat pedal entrapment in Model Year 2010 Lexus RX 350s since 2009. Toyota’s own technicians and dealer technicians reported that certain alleged incidents of unwanted acceleration had been caused by floor mat pedal entrapment.

In June, Toyota advised NHTSA that it would conduct a recall of 154,036 Model Year 2010 Lexus RX 350 and Model Year 2010 RX 450h vehicles to address floor mat pedal entrapment.

As part of today’s settlement, Toyota Motor Corporation and its U.S. based subsidiaries agreed to make internal changes to their quality assurance and review of safety-related issues in the United States, and to improve their ability to take into account the possible consequences of potential safety-related defects.

The last time Toyota faced civil penalties was in 2010 when the automaker agreed to pay $48.8 million as a result of three separate investigations into the automaker’s handling of auto recalls. The automaker paid maximum civil penalties for violations stemming from the pedal entrapment, sticky pedal and steering relay rod recalls.

Toyota recalled 8 million vehicles worldwide in a series of actions in 2009 and 2010 to address defects linked to dozens of reports of sudden acceleration. Several of the accidents resulted in fatalities. The scandal led to a lengthy investigation that ultimately determined that the sudden acceleration incidents weren’t caused by the electronics in Toyota vehicles, but instead mechanical defects — such as poorly designed floor mats — or driver error. The Transportation Department fined the company $48.8 million for failing to properly disclose what it knew about the problems.

Mr.Toyoda, in testimony before Congress in February 2010, apologized for the safety problems and for the way the company handled them, and said Toyota would take steps to assure that future safety problems were reported in a timely way.